LIGHTHOUSE GOING DARK FOR REMODEL

A familiar presence on Harbor Island for the last four decades, Tom Ham’s Lighthouse is preparing to temporarily shut down after the first of the year as it undergoes a $3.5 million makeover designed to raise its profile as a waterside dining destination.

While its owners, Susie and Larry Baumann, realize it’s time to reinvent the aging restaurant, they’re being prodded along by the San Diego Unified Port District, which creates incentives for tidelands properties to invest heavily in improvements before their leases expire.

Earlier this year, Point Loma Seafoods debuted its $2.8 million makeover, while two years earlier, the Bali Hai on Shelter Island, also run by the Baumanns, underwent a $4 million face-lift.

The expectation is that such renovations, although costly, will significantly boost business while also generating higher lease revenues to the port.

“We decided that it was really time to reinvent the lighthouse as we did with the Bali Hai,” said Susie Baumann, whose late father Tom Ham opened the Lighthouse restaurant in 1971, 16 years after taking over operation of the then struggling Bali Hai. “We couldn’t just add a new chef and a great new menu, because people don’t have in their heads that you made great new changes.”

Port officials noted that the restaurant has rarely generated enough revenue to exceed its minimum base rent of $190,000 a year, which will eventually rise to $300,000 under a new 30-year lease option agreement authorized earlier this year by Port Commissioners.

Following the Bali Hai renovation, the district said it realized an increase in the restaurant’s percentage rents of more than 70 percent and expects a similar outcome with the Tom Ham’s repositioning.

“We have a policy that dictates how we proceed (with leaseholds) in order to give tenants a road map of what our expectations are,” said Karen Weymann, director of real estate for the port. “The basic premise is that we all make more money if they keep investing in their leasehold. That gives us more rent to invest in port facilities.”

As an incentive for tenants to improve their properties, the port agrees to not seek a new operator if the business submits a redevelopment plan while there is still 20 percent of the lease term remaining. Tom Ham’s lease had been due to expire in 2021.

“If the tenant doesn’t reinvest, we can go out with a (request for proposals) and look elsewhere,” Weymann explained.

Best known for the still functioning lighthouse incorporated into the design of the restaurant, Tom Ham’s has thrived on its weekend brunches but needs an updated design and expanded bay-view dining to grow its customer base, Baumann acknowledged. It received a modest face-lift seven years ago, she added, but nothing approaching the extent of the planned redesign.

The proposed redesign of the early California Spanish-style structure calls for a second-story, 1,500-square-foot deck for patio dining; the removal of heavy wood trellises in favor of a more contemporary, metal and glass exterior; and relocation of the bar to the bay side, Baumann said. Inside, windows will be lowered to offer a better view of the downtown skyline.